Immigration could be answer but reluctance remains high

Sasrutha polishes machine parts and cleans offices in western Tokyo up to 60 hours a week, more than double the limit set by his student visa.

He has no problem finding willing employers, even though officially he is only allowed to work 28 hours a week.

“It’s a silly rule,” shrugs the 20-year-old Sri Lankan, who would not give his last name. “Immigration officials come, I go to the next factory. There is always work.”

People are retiring at a faster rate than young people are joining the labor force, which means there is plenty of work for the likes of Sasrutha.

But Japan is not in a rush to inflate its shrinking workforce with immigrants despite dire warnings that action is needed now to stave off a future pension crisis, a fall in productivity and ultimately a contraction of the economy.

“Immigration is one of the ways nations can change their destinies,” said Richard Hokenson, founder of consulting firm Hokenson & Co., which applies demographics to market forecasting.

“I am doubtful that Japan will actively try to import persons from other countries to a meaningful extent.”

The economy includes 600,000 registered foreign workers and an estimated 178,000 illegal workers.

In a homogenous country traditionally wary of outsiders, foreign workers are seen as a last resort to boost the shrinking workforce.

Instead, the preference is to bring more women into the workforce, keep senior citizens working and even resort to robots — but experts say these steps will not be enough to fill the hole left in the labor force as the population ages.

The government estimates the workforce will plunge 16 percent by 2030 to 56 million unless the labor participation rate picks up.

A decline of that size would strain the public and corporate pension systems as payouts rise while the number of people paying in drops.

The government would also receive less tax revenues to fund its spending plans, putting additional strain on its finances, economists say. The public debt is already equivalent to 150 percent of national income.

Instead, government officials hope the sort of technological innovation that propelled the economy in the 1980s will offset the impact of the shrinking workforce, a drive that is leading to a more relaxed attitude to highly skilled immigrant workers.